Does income convergence among countries really occur?
DOI:
https://doi.org/10.1590/0101-4161201545282mfeKeywords:
spatial interaction, income convergence, spatial econometricsAbstract
The most studies on income convergence imply that countries are isolated geographic
units, not considering the underlying spatial interaction (spatial dependence and
heterogeneity). This paper investigates the analysis of income convergence among countries incorporating the neighborhood effect provided by the spatial interaction
and, thereby, controlling for spatial dependence and spatial heterogeneity. To do so,
a local spatial model was constructed over five-year period between 1985 and 2005
for 148 countries. Main findings reveal the existence of multiple equilibria considering
the analysis of local convergence. A group of countries is approaching a particular
equilibrium due to the existence of correlated attributes or because it was in an initial
location corresponding that equilibrium, fact in line with the convergence clubs and
multiple equilibria. The convergence intervals defined here result from how economic
growth in a country progresses as for its pace, which is conditioned to its initial
socioeconomic characteristics in relation to the growth of other countries and not in
relation to its own growth trajectory. Furthermore, in contrast to convergence clubs,
these convergence intervals are defined ex-post, taking into consideration the growth
dynamics specific to each country.
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